How You the Taxpayer Will Be Paying Up for the NHI

On Thursday, the new National Health Insurance (NHI) Bill was tabled in parliament and sheds some light on the creation of the controversial new NHI Fund. 

It is explained in the memorandum that the reforms will be implemented in six phases. The Department of Health will release the details of such in a series of implementation plans. 

However, the burning question for taxpayers and medical aid members is if they will still be able to belong to a medical aid and if they can, will they have to pay medical aid contributions and a contribution to the NHI. 

In short, the answer would be yes, but the details of such have not yet been released. 

The NHI will be funded in the following ways:

  1. General tax revenue where funds from provincial health budgets are shifted to the NHI fund
  2. Medical scheme tax credit will be transferred to the NHI fund.
  3. Payroll tax
  4. A surcharge on personal income tax

At the moment, it’s unclear as to what this will actually cost taxpayers, but through a money bill, the minister of finance will introduce these taxes. 

According to the memorandum only in the final stage will these tax options be evaluated, so it would seem that it won’t be before 2022.

Also, it is thought that it will be a small payroll tax, but it’s unclear what this means. 

In the memorandum, there is a part that deals with the financial implications for the state and refers to various financing options, but it also refers to imposing further taxes at a later stage after an evaluation of the potential impact and it will take into account the economic and fiscal environment at the time.

What does seem to be certain is that taxpayers will no longer receive medical scheme tax credits. 

Even though things are still unclear at the moment, one thing that isn’t is that taxpayers will find the additional tax burden a hard pill to swallow. 

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